Chicago | Reuters –– U.S. soybean futures dipped on Wednesday on better-than-expected U.S. crop ratings and concerns about sluggish export demand.
Wheat futures also declined, while corn traded near unchanged.
Soybeans pulled back after rising on Tuesday on expectations that the U.S. Agriculture Department would cut its condition ratings for the crop in a weekly report due to unfavourable weather. Instead, the agency kept its ratings for soybeans and corn unchanged from the previous week.
“The biggest problem you’ve got going on right now is everybody was looking for lower ratings and they didn’t happen,” said Jim Gerlach, president of A/C Trading in Indiana.
Chicago Board of Trade November soybeans fell seven cents, or 0.8 per cent, to $8.72-1/4 a bushel, after rising 1.5 per cent on Tuesday (all figures US$). December corn gained 3/4 cent, or 0.2 per cent, to $3.69 a bushel after rising 1.4 per cent on Tuesday.
December wheat lost 2-3/4 cents, or 0.6 per cent, to $4.72-1/4 a bushel, having closed up 1.5 per cent on Tuesday. The nearby contract touched a five-year low on Friday due to large global supplies and poor demand for U.S. wheat.
Weak futures prices will likely discourage farmers from making cash market sales of corn and soybeans around the U.S. this fall.
Farmers and traders are waiting for USDA on Friday to issue monthly reports updating its forecasts for the U.S. harvests. Market activity will likely be choppy until the data are released, analysts said.
On Tuesday, reports of lower-than-expected U.S. corn yields helped boost grain prices.
The “trade appears mindful of disappointing yield reports thus far” in the Corn Belt, said Rich Feltes, head of Market Insights for broker RJ O’Brien. Still, traders are “cautious in applying early results belt-wide” because the harvest is not actively underway in the Midwest yet, he added.
USDA is expected to cut its U.S. corn production estimate to 13.599 billion bushels, with an average yield of 167.6 bushels per acre, from its August estimate of 13.686 billion, with an average yield of 168.8 bushels, according to a Reuters poll of analysts.
The agency will likely cut its soy production estimate to 3.869 billion bushels, with an average yield of 46.4 bushels per acre, from its August estimate of 3.916 billion, with an average yield of 46.9 bushels.
Export demand for U.S. soybeans has been sluggish due to competition for business from South America.
— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.